The Vigilante's View on the Markets, Gold and Gold Stocks

Times like these are why we are dollar vigilantes. Talk is incessant about
a possible collapse of the European Union - something which we consider to
be a certainty. They can let it collapse now or paper it over again and see
if they can keep that dead man walking a little longer.

Meanwhile, in the US, the talking heads in mass media look dazed and bewildered
that, perhaps, the US is entering "back into recession". Almost all of them
have been brainwashed at the Keynesian alter and actually think the US economy
has been "growing". The truth of the matter is that the US has been in a depression
since 2000. It's an highly inflationary depression, however, and it has managed
to fool the great majority. They still listen to government statistics that
are fallacious, such as the GDP (see The
GDP is a Fallacy). But if they just opened their eyes and could see through
the fog of decades of brainwashing and propaganda, they'd see that the true
US unemployment rate is probably closer to 23%, over 45 million people
are in today's version of soup lines (now called food stamps) and the US stock
markets, in real terms (gold), are down 90% from their highs in 2000.

The scary part, for everyone, is that this depression is just getting started
and the more they try to "stimulate" the economy, the worse it will get.

The great bearded one, the one who centrally plans the US economy, Ben Bernanke,
added one word into his speech (the word "significant") when talking about
downside risks and the lemmings all rushed off the edge of the cliff. It's
confusing as to why they would listen to anything Bernanke says. Besides the
fact that he is the leader of a criminal money counterfeiting cartel he also
has been almost shockingly
wrong on every prediction or forecast he has ever made.

Almost everything sold off today... even taking down gold and gold stocks
with it. Let's take a look at what kind of damage was done to the assets in
our portfolio.

Gold is now down to where it was about a month ago. Nothing too serious. Although
if it goes much lower it could break support and could see a return to the
$1500s. Perhaps even $1450. If that happens we will be shouting from the rooftops
to buy. However, we hold gold bullion mainly for safety and as a hedge and
so it doesn't matter if gold does go down another $150 or up $150... it doesn't
mean we'd be selling now in either case. All it means is that we'd be collecting
pop bottles on the side of the road to buy more gold at $1500.

Now, the thing we hold with hopes of significant profits is gold stocks. Let's
take a look at them today. First, the majors:

A noticeable swan dive. Yes, that's for sure. But, just like gold, it just
takes us to where we were a month ago after a nice rally that lasted all summer.
Could it go down to 500? Sure. Anything is possible. And, again, if it does,
we'll be borrowing money from relatives to put into the market. But, we think
the gold stocks can rise from here even if gold sits around $1600... they
are still very undervalued.

And, finally? Everyone is eyeing the juniors. We received a lot of email today
saying how this is starting to feel a lot like 2008. Let's look at the TSX
Venture Exchange (CDNX) which is a reasonable proxy for mining juniors. First,
let's look at its chart since 2005.

The junior mining markets are the most volatile in the world and that is why
we rarely have more than 15% of our entire portfolio in them... they can go
up 1,000% but many of the stocks can also go to zero. This chart shows that
as well as anything.

During the 2008 segment of the crisis, the TSX-V index fell from over 3,000
to under 700 in a span of a few months. It then more than tripled by March
of this year and is off more than 30% since then. The question everyone is
asking is if we are headed for that massive dive-bomb again this time around.

TDV subscribers know all of TDV Senior Analyst, Ed Bugos' past thoughts and
research on this question and know that he is not expecting that. To add to
Ed's analysis I submit this chart. This is a chart of the TSX Venture Index
in terms of gold, not dollars.

This chart shows that in terms of gold, we are already near the 2008 bottom.
And this at a time when gold has doubled in price in the same time frame,
from $800 to over $1600. Can they still go lower? Sure. Anything can happen.

But, its more likely that they we will see 100%+ type gains over the next
few months on the juniors. And, if the general public wakes up to what is
going on, 1,000% and 10,000% gains aren't out of the question for certain
juniors. Even just a return to where juniors were in 2007, versus gold, would
entail a 500% pop.

Obviously we aren't yet at that point. But every day that central bankers
try to paper over the obvious structural issues in their artificial, non-free
market financial system we draw closer to a true gold stock mania.

This weekend Ed Bugos will have a full update to subscribers
on what the action of this week portends and will look at opportunities to
scoop up some gold mining stocks cheap. Subscribe
to TDV today to keep abreast of all the action in the gold and
gold mining shares and receive actionable info on how to take advantage of
opportunities in the sector.

Anarcho-Capitalist. Libertarian. Freedom fighter against mankind's two biggest
enemies, the State and the Central Banks. Jeff Berwick is the founder of The
Dollar Vigilante, CEO of TDV Media & Services and
host of the popular video podcast, Anarchast.
Jeff is a prominent speaker at many of the world's freedom, investment and
gold conferences as well as regularly in the media including CNBC, CNN and
Fox Business.

Jeff's background in the financial markets dates back to his founding of Canada's
largest financial website, Stockhouse.com, in 1994. In the late '90s the company
expanded worldwide into 8 different countries and had 250 employees and a
market capitalization of $240 million USD at the peak of the "tech bubble".
To this day more than a million investors use Stockhouse.com for investment
information every month.

Jeff was the CEO from 1994 until 2002 when he sold the company and still continued
on as a director afterwards until 2007. Afterwards, Berwick went forth to
live on and travel the world by sailboat but after one year of sailing his
boat sank in a storm off the coast of El Salvador. After being saved clinging
to his surfboard with nothing but a pair of surfing shorts left of all his
material possessions he decided to "live nowhere" and travel the world as
spontaneously as possible with one overarching goal: See and understand the
world with his own eyes, not through the lens of the media.

He went on to visit nearly 100 countries over four years and did and saw things
that no education could ever teach. He met and spoke with a plethora of amazing
people, from self-made billionaires to some of the brightest minds in finance
- as well as entrepreneurs from a broad range of backgrounds and locations
from tech companies in southern China to resource developers in Mongolia,
Thailand, Russia and Chile. He also read everything he could find on how the
world really works... politically and financially. A pursuit he continues
to this day.

He expatriated, long ago from his country of birth, Canada, and considers
himself a citizen of the world. He has lived in numerous locales since including
Los Angeles, Hong Kong, Bangkok and currently lives in Acapulco, Mexico and
is building a home in Cafayate, Argentina. In essence, everything he writes
about here for TDV he has done or is doing.

As well, during his travels, both real and virtual (through the internet),
he met some amazing people who have a similar shared vision of what is currently
going on in the world and enticed them to come aboard TDV and provide their
own brand of analysis.